Published October 16, 2012 by Candy Evans

The Medicaid nukes are coming to town from Washington, D.C. to infuse more power into Greg Abbot’s investigation of pediatric orthodontic Medicaid fraud, the kind that Byron Harris has brought to the radar. He and other whistleblowers say abusing Medicaid reimbursements helped pediatric dentists like Richard Malouf roll in billions and build enormous homes, buy second and third homes, build backyard waterparks and live amazingly lavish lifestyles on the tab of U.S. taxpayers. Malouf may be crazy enough to build a water park in his back yard on Strait, but there are other guys just like him in humungo homes paid for with pediatric Medicaid funds that may be perfectly legit… or may not be.

“ State authorities familiar with the task force’s investigations said the group is committed to recovering all taxpayer funds lost to dental fraud, from both dental providers and the Texas Medicaid and Healthcare Partnership, which was responsible for evaluating the medical necessity of dental claims and approving payment.”

So many times these investigations turn up with empty pockets — the crooks have spent the money and are “broke”. This time, however, I hear the Feds are onto a hot lead with deep pockets. Like a local company you may have heard of called Affiliated Computer Systems on Central Expressway that is now owned by Xerox.

The other question I have is this: who are the folks IN AUSTIN who let this rampant, in my view obscene rip off of Medicaid resources take place? There is one thing I will say about Richard Malouf and the others: he may have taken advantage of a situation that was wide open to him, the perfect pass. But the Texas Department of Health and Human Resources under Rick Perry, was totally asleep at the wheel on this one. They can say–

Most of the rise in Medicaid dental claims was probably legitimate, said Stephanie Goodman, spokeswoman for HHSC, because the state had increased reimbursement rates by 50 percent to expand access to care. “Those other factors kind of masked the fact that there was also probably an increase of bad actors in the program,” she said.

“…it was common knowledge among Texas dental providers that the company contracted by the state to administer Medicaid dental claims, Texas Medicaid and Health Partnership, and its subcontractor, ACS Xerox, rubber-stamped most claims to put braces on children. The federal and state governments are currently auditing that since-replaced orthodontic authorization process, but state officials have already fired the dental director of TMHP and admitted they’ve found problems in the prior authorization process. Lawyers say it’s possible the state could pursue fraud charges against those contractors for approving medically unnecessary claims, but it seems unlikely, particularly because it would mean acknowledging mismanagement of the program.

Texas became a bull’s eye target for dental fraud after 2007, when after a lawsuit, the Legislature allotted an additional $1.8 million for Medicaid children’s dental services to increase access to care. Still, this was their job: watching the henhouse. Perhaps the state bureaucrats, who are by now long gone, should be prosecuted? Will be prosecuted?

Stories like this peel back the way government often works, and leaves me more skeptical than ever of government-controlled health care. Medicaid reimburses dentists and physicians very little for honest health care services because funding is sparse. And Medicaid patients tend to be needier, the sickest of the pool, so they utilize more services. Therefore many physicians won’t take on Medicaid patients. They tend to be bigger liability risks. Even if they do agree to treat them, with reimbursements pennies on the dollar, docs cannot find specialist referrals. Once the state of Texas increased reimbursement rates by 50% for pediatric orthodontics, the corporate dental clinics of DSO’s couldn’t get here fast enough.

Then I ask, where the hell was the Texas Dental Association when all this happened and what are they doing to punish these dentists? One whistleblower out of Fort Worth told the Texas Tribune that -

” she had to remove six teeth in a child’s mouth that had abscessed less than six months after Medicaid paid for the child to be treated at a nearby dental clinic. “When I see this type of situation, I’m pulling patient records, I’m keeping patient records, I’m calling the [Office of the Inspector General],” said Staffel.”

Without due process protections and other important changes in the rules as proposed, “the pervasive fear among physicians that they will be incorrectly accused of fraud, waste, or abuse, or denied meaningful recourse in a fraud investigation will continue to contribute to the decline in physician participation in Medicaid.”

But oh well, Richard Malouf has a waterpark in his backyard for his family. Who cares about the rest of us?